Big and Small Ideas by Rudy Owens

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A primer on the futility of buying health insurance in the open market

On Sept. 19, my University of Washington graduate student health insurance plan expires. I paid $607 a quarter last year, four quarters a year, for two years for this plan. It was OK. I never really “used” it for anything. I did have my knee looked at, and a finger was inspected once that got dislocated that I actually fixed, but no real “medical care” was ever provided except consultation. Only one visit really required a specialist’s expert analysis, but I actually deduced a similar conclusion from online research. Short of a medical test, even that expert opinion was just that, an opinion. So I am left wondering what this investment served. It did not cover in-house physical therapy, massage, or chiropractic care—all forms of medical care that I truly believe promote health and wellness without expensive, harmful pharmaceuticals and that use non-invasive techniques to promote healing through touch and manipulation of the body’s muscles and skeletal system.

Massage should be covered at higher levels by all insurance plans, as it provides excellent health outcomes with few negative effects and no medication.

I was supposed to cover those expenses “out of network” at 60%. As a former graduate student, I had to weigh medical care versus, well, paying for food and rent, and I simply put off the care I needed the most and used to get when I had a plan with my former employer in Alaska – chiropractic care and massage therapy. There were times I was in excruciating pain that simply had to be ignored because my insurance did not cover it, and those problems could have been addressed if I paid for much of it, after my deductible.

So now I am in the open market of insurance again. This is that wonderful place where the “invisible hand” of Adam Smith is supposed to provide solutions without “government interference.” Well that is not the case. The market is somewhat regulated by the Washington State Insurance Commissioner. They put together a good web site to help consumers understand the nine companies that offer health insurance plans in this state and the types of plans available to them. I think they did a good job.

Such communication for consumers is critical, as insurance companies prefer to communicate in “insurance speak” language involving legalese and jargon such as “co-pays,” “deductibles,” and let’s not forget “pre-existing conditions.” Here’s just a taste of one clause from one plan on how they try to limit coverage for a “pre-existing condition”: “Pre-existing conditions: these plans contain a nine-month pre-existing condition clause that excludes coverage for any condition for which there has been diagnosis, treatment (including prescribed drugs), or medical advice within the six-month period prior to the effective date of coverage, for which a prudent person would have sought advice or treatment. Section 6 of the application for our individual and family plans will help us determine whether you have creditable coverage, which would allow [COMPANY NAME REMOVED BY AUTHOR] to waive pre-existing conditions/exclusions for you and/or your dependent(s).”

No, choosing insurance is never easy because the language is often confusing and many non-experts cannot decipher the fine print of the brochures with happy, smiling people used to lure in customers.

Such language is not simple or easy to understand, and in theory, the Patient Protection and Affordability Care Act (health insurance reform passed by Congress recently) will make it impossible for insurance companies to deny persons health insurance in the future because of a pre-existing condition. It is not clear if non-English speakers can understand this information at all. While many people have fought with insurance companies, many lower-income or less-educated persons may not have significant experience navigating complex legal documents that, quite frankly, I think people with MBAs or law degrees do not fully understand. Here are two companies’ plans that offer health insurance to individuals in the state of Washington (there are exactly nine corporate players in this limited market): LifeWise, Group Health.

I chose LifeWise. I am waiting for them to approve my plan. I will have to have proven I actually had coverage before (I did as my UW plan was owned by them) and am likely not a deadbeat. I am sure they are probing my legal, credit, even personal records as I write this to determine if I have been an actuarial risk to providers, if I have some terrible health condition that would harm their profit margins, and if I am generally on the up and up as a possible customer to help them make a “reasonable rate of return,” which is really all a company can hope to do. This all is, of course, unlike other developed democracies, because our country continues to refuse to adopt a single payer plan that other countries like Canada and France have taken up with better population health outcomes for their citizens and less gauging of consumers.

So what will I get if I am approved? I signed up for the basic catastrophic plan called “Wise Simplicity”. I would pay $160 month as a nonsmoker, and have a $10,000 deductible (compared to an $1,880 deductible that would cost me about $370 a month). So if I am hit by a car, I pick up the first $10,000 out of pocket? Great, eh?

So what do I get with the barebones plan? Well, basically a plan that tells me not to get sick and certainly don’t have an accident that costs $9,999.

I simply cannot afford another plan now. And this deeply worries me, until I get a job with coverage (and that is coming soon – yeah!). Two people I know in my immediate circle of friends just had enormous medical bills. One friend had elective knee replacement surgery. I cannot imagine that is less than $50,000 to $100,000 in costs (surgeon, anesthesiologist, several nurses, equipment, rehab, etc.). Another friend had a horrible and likely allergic reaction to a standard immunization and developed a syndrome that sent them to the hospital, where the same issue ensued with specialists, etc. My friend guessed the bills before insurance will be at least $100,000. So as I bike down Seattle’s dangerous roads, avoiding cars that do not know I am there as the driver texts a message about whatever, I contemplate just how flimsy my health care coverage really will be come Sept. 20. I guess the answer is what some running for office suggest – just don’t get sick. You know what I really do not have a choice. Adam Smith’s invisible hand I guess is making that possible, but why do I feel more like the hand is choking off my air supply and giving me a sucker punch when I am not looking.

One thought on “A primer on the futility of buying health insurance in the open market”

Well this was interesting. Today I received an email from LifeWise noting I had to complete a 27-page health status/history/background survey (yes, 27 pages) asking more than 200 questions about my health status on everything from depression to HIV/AIDS to kidney stones, all to be rated on a 320-point scale designed to measure my health status and risk to the bottom line of the company were it to offer me a product costing $160 a month. The form is actually created by the Washington State High Risk Insurance Pool, the last gasp for persons denied coverage by private carriers.

When I called the Washington State Insurance Commissioner’s office, I was told this was entirely legal. I was further told my private health information, by law, could only be held by LifeWise for 90 days and then destroyed. I also was told this was legal because I did not previously have an insurance plan offered by an employer; my insurance plan through the University of Washington with, yes, the same company (LifeWise), did not exempt me from doing an invasive probe of my personal and health history with the explicit goal of preventing me from getting coverage. And this for a stopgap, catastrophic plan with a $10,000 deductible. I told the representative at the insurance commissioner’s office I would be writing the commissioner a note and my state lawmakers.

When I called LifeWise to ask why I had to do this invasive questionnaire, the representative told me she was unaware of any law requiring the company to delete health information in 90 days. And she confirmed, no, my two years of health insurance company did not count because I was just a graduate student and did not have an employer-based plan. She further added that this form is basically what everyone does and that I had to do it. I told her I would evaluate if the risk of having terrible coverage was worth the effort of sharing information for a limited time that they theoretically will “delete.” Does anyone in their right mind believe an insurance company would delete health information once it is gathered on a person? I mean, this defies logic and reason and common sense.

The whole experience has left me deeply and profoundly disturbed by any form of public debate that does not conclude our health insurance system, in the private market, is not only broken, but likely beyond repair and hostile to consumers. Here is where one can download this high risk survey that is “what everyone does — so get the hell over it”: https://www.wship.org/Docs/SHQ%20Revised%2004%203%202012%20Final%20Post.pdf.